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Motor Insurance Policy

Motor insurance is an insurance policy that covers the policyholder in case of financial losses resulting from an accident, physical damage, bodily injury or other damages. A comprehensive motor insurance policy covers damages to third-party and third-party property along with compensating for own losses as well.

According to Sec 146 of the Motor Vehicles Act, 1988, it is imperative that you purchase motor insurance prior to taking your vehicle out on the roads.

If you do not want to take a comprehensive insurance policy, then getting third party policy coverage is the bare minimum.

Motor Insurance Policy
Introduction
Who can take this Policy?
Coverage
Add on Covers
Basis of Sum lnsured
Exclusions

Motor insurance is one of the largest nonlife insurance of the world. This is because it is statutorily mandated in most parts of the world. All motor vehicles are required to be registered with the road transport authorities and insured for Third Party Liability. The basic premise is that the motor vehicle could either cause injury or to a subject of damage, and thus require insurance. In India the Motor vehicles act was passed in 1939 and in 1946 the third party insurance was introduced compulsorily. The need for compulsory motor insurance is obvious. There has been a phenomenal rise in the motor accidents in last 4-5 years. Much of these are attributable to a sudden spur in the number of vehicles. Every vehicle before being driven on roads has to be compulsorily insured.

All type of cars registered in India, Motorized Two wheelers and commercial vehicles including vehicles running on rails.

The Motor insurance policy represents a combined coverage of the vehicles including accessories, loss or damage to his property or life and the third party cover. When you buy a motor vehicle, you need to buy a motor insurance. There are, however, many types of motor insurance policies available.

The common types are:

  • Third party cover - This policy insures you against claims for bodily injuries or deaths caused to other persons (known as the third party), as well as loss or damage to third party property caused by your vehicle.
  • Third party, fire and theft cover - This policy provides insurance against claims for third party bodily injury and death, third party property loss or damage, and loss or damage to your own vehicle due to accidental fire or theft.
  • Comprehensive cover - This policy provides the widest coverage, i.e. third party bodily injury and death, third party property loss or damage and loss or damage to your own vehicle due to accidental fire, theft or an accident.
  • Insurance at Manufacturers Selling Price (Insured’s Declared Value ie equal to Manufacturers’ Selling Price )
  • Return to Invoice Value / Invoice Protection Cover (Insured’s Declared Value ie equal to On Road Price)
  • Depreciation Waiver (Zero Depreciation Cover)
  • Consumables Cover
  • Key Replacement Clause
  • Car Engine Protection Cover
  • Loss of Personal Belongings Clause
  • Daily Cash Allowance Benefit
  • Protection of NCB
  • Road Side Assistance
  • Loss of Driving License/Registration Certificate
  • Additional Expense Coverage Clause (Emergency Hotel or Transportation Expenses)
  • Additional Accidental Injury Compensation Clause for -Owner Driver
  • Additional Accidental Injury Compensation Clause-Family
  • Wider PA Benefit Clause for - Owner Driver
  • Accidental Hospitalization Clause for Family
  • Child Education Support Clause
  • Electrical and Mechanical Breakdown Coverage Clause
  • Hospital Daily Cash Cover

Person can insure the vehicle on the following values:

  1. Insured's Declared Value
  2. Invoice Value
  3. Depreciated Value

Any damage to the car due to war, terror attacks, invasion, foreign enemy action, civil war, mutiny, rebellion, hostilities, radiation or nuclear material/weapons are not covered under a standard motor policy.

IMPORTANT POINTS TO REMEMBER WHILE BUYING THE POLICY

NCB declaration should be proper

  • NCB declaration should be accurate otherwise policy would become null and void.

Declaration of claim status

  • Any Claim in previous policy should be informed at the time of renewal otherwise policy would be become null and void.

Always go for Zero depreciation policy

  • In order to avoid any deduction in claim amount then one should go for Zero Depreciation Cover.

Key Documents at The Time Of Claims

General Claim
Intimation Format
Immediate Action Client
Should Take
Indicative General Documents
for Settlement of Claims

Why Choose Us?

Professional & Experienced Team
Professional & Experienced Team
Customized Solutions
Customized Solutions
Strong Relationship With Insurance Companies
Strong Relationship With Insurance Companies
Service Commitment ONTIME EVERYTIME
Service Commitment ONTIME EVERYTIME
Technological Edge
Technological Edge
Additional Services Offered
Additional Services Offered
Competitive Premium
Competitive Premium
Single Window Solution
Single Window Solution

Downloads

Proposal Form  
Policy Wordings  
Claim Form  

FAQ's

PREMIUM
COVERAGES
CLAIMS
OTHERS
  • What are the types of cover?
    There are two types of policy:
    • Comprehensive Insurance
    • Third Party Insurance

    The comprehensive insurance policy offers protection to you and your car. The comprehensive cover comprises of:

    • Damage to your vehicle
    • Third party legal liability
    • Personal accident cover to driver (owner)

    Third party insurance is part of comprehensive policy but can be purchased alone. It is mandatory to have third party insurance policy.

  • What are the general exclusions under comprehensive Policy?
    Followings are generally not covered under any comprehensive policy:
    • Mechanical breakdown
    • Wear & tear
    • Consequential loss
    • Depreciation
    • Deliberate accident loss
    • Intoxicated driving
    • Any contractual liability
  • What if other than owner was driving at the time of the accident? Is that person covered by owner's Policy?
    If the person driving the vehicle has a valid license, the vehicle is insured for all the accidents that occurred due to the hazards specified. To insure the person driving the vehicle, who is not the owner, an additional personal accident cover has to be taken for unnamed passengers. For the owner-driver, the policy compulsorily has a personal accident cover, as per tariff.
  • What is Personal Accident cover? What are the rules governing it?
    The insured is adequately covered in case of an occurrence due to the specified hazards leading to bodily injury/ permanent disability or death. The motor insurance policy essentially has a PA cover for the owner-driver, as per tariff, for which no extra premium is to be paid. For a person other than the owner and driver, the PA cover has to be taken separately paying an additional premium. The amount paid as compensation depends upon the extent of cover opted for. And for the driver, the extent of the cover is in accordance with the Workmen's Compensation Act.
  • Can No Claim Bonus be forfeited? If yes, then why?
    NCB will be forfeited in following cases only:
    • If there is any claim made
    • If there is a break in the insurance period for more than 90 days
  • Can the accessories of the vehicle be insured? If yes, to what extent?
    You can insure your vehicle accessories under electrical and non- electrical items whose amount is not included in the showroom price of the car but are fitted separately to the vehicle. For that you need to declare the value of such items separately, which will be added to the sum insured over and above the IDV (Insured's Declared Value).
  • What happen if the vehicle has an additional CNG kit?
    In case of vehicles fitted with bi-fuel system such as Petrol/ Diesel and CNG/LPG, permitted by the RTA concerned, the CNG/LPG kit fitted to the vehicle is to be insured separately at an additional premium of 4% on the value of such kit. You need to specifically declare this in the proposal form.
  • What is IDV(Insured's Declared Value) and how it is determined?
    "The Insured's Declared Value (IDV) of the vehicle will be deemed to be the 'SUM INSURED' for the purpose of motor tariff and it will be fixed at the commencement of each policy period for each insured vehicle. The IDV of the vehicle is to be fixed on the basis of manufacturer's listed selling price of the brand and model as the vehicle proposed for insurance at the commencement of insurance /renewal and adjusted for depreciation (as per schedule specified below). The IDV of the side car(s) and / or accessories, if any, fitted to the vehicle but not included in the manufacturer's listed selling price of the vehicle is also likewise to be fixed. Schedule of Depreciation for arriving at IDV:
    • Below the Age of the vehicle & % of depreciation for fixing IDV
    • Not exceeding 6 months: 5%
    • Exceeding 6 months but not exceeding 1 year: 15%
    • Exceeding 1 year but not exceeding 2 years: 20%
    • Exceeding 2 years but not exceeding 3 years: 30%
    • Exceeding 3 years but not exceeding 4 years: 40%
    • Exceeding 4 years but not exceeding 5 years: 50%
  • How to Calculate Value of accessories?
    The value of accessories is calculated on the original cost of purchase of the accessory less depreciation for the usage. The depreciation is applied at the same rate as is applied for a vehicle for calculating IDV (Insured's Declared Value).
  • Legal Liability Cover for paid driver. What dose it cover?
    This covers Legal liability to paid drivers /and/or cleaner employed in connection with the operation and/or maintenance of motor vehicle under the Workmen's Compensation Act, Fatal Accidents Act and at Common Law.
  • What are the general steps adopted by the insurer to settle claims?
    Generally following procedure adopted by the insurers once the claim form is filled and filed along with the necessary documents.
    • The surveyor attends the claim within 24 hours from the time of intimation.
    • Take photographs, assess, estimate and inform assessed estimates to the User within the same day of assessment.
    • After the completion of the job, the Surveyor carries out re-inspection. The insured then makes payment to the workshop/ garage as per the surveyor's assessed estimation and releases a proof of release document. (The proof of release is an authenticated document signed by the insured to release his vehicle from the garage after it is checked and repaired).
    • Lastly, the insured submits the original bill, proof of release and cash receipt (derived from the garage) to the surveyor.
    • The surveyor then sends the claim file to the Insurance Company for settlement along with all the documents.
    • Insurance company then reimburses the Customer within seven working days from the date of receipt of claim file.
  • Is there any cashless facility available?
    Yes, if you take your vehicle to insurer's authorized garage/workshop for which insurer have agreement for cashless facility, you can avail cashless repair of damages. These garages come under network garages.
  • What is the amount that insured would have to bear?
    Insured will have to bear the following charges:
    • The amount of depreciation as per the rate prescribed by the Tariff advisory Committee
    • Reasonable value of salvage
    • Compulsory and voluntary deductions under the policy, if insured have opted for it.
  • What is claim is lodged after the expiry of the policy date for an event that occurred during the policy period?
    The claim is still valid even after the expiry of the policy date because the event took place during the policy period.
  • Will the claim affect Renewal?
    Yes, if claim is filed for any kind of damages during the insured period, at renewal, all the NCB ceases that have been accrued over the years. So it is advisable to always compare the amount of future NCB and claims before filing for any claim.
  • What is the meaning of deductibles? What is the deductible applicable to a Private Car?
    Deductible is the portion of claim that is not insured under the policy. Voluntary deductible is the amount that you have to compulsorily bear during the event of a claim.For e.g., if your claim amount is 15,000 and the voluntary deductible is 4000, then you have to bear the first 4000 and the claim will be worth 11000. Discount on the premium is given for choosing higher deductible. There is also a compulsory deductible applicable as per the Indian Motor Tariff:
    • Private Cars (Not exceeding 1500cc) 500
    • Private Cars (Exceeding 1500cc) 1000
  • Why do I need car insurance?
    If you own a car in India you need to have car insurance by law. Car insurance protects you from financial loss and liability. Apart from the fact that it is legally required, it can save you from financial ruin. While driving you are responsible for the safety of:
    • Your passengers
    • Your fellow drivers
    • Other people's property
    • Pedestrians
    • Yourself
    Insurance helps cover the costs of potential damages or injuries in case of an unforeseen accident or theft and helps you in obliging any legal liability arises because of your driving. In its simplest sense, car insurance is smart planning that can help protect you from expensive, sometimes devastating surprises.
  • Can the policy be renewed online?
    Private car insurance policy can be renewed online, provided you renew it between the period starting 2 months before expiry and 6 days after expiry of the previous policy. Please keep in mind that not all the insurer has online buy/renew facility with them.
  • What is No Claim Bonus?
    No Claim Bonus (NCB) is the discount earned in the own damage part of premium due to a claim free year. An insured becomes entitled to NCB only at the renewal of a policy after the expiry of the full duration of 12 months. As per the schedule of tariff, NCB can be earned in the Own Damage section of Policies covering all classes of vehicles but not on Motor Trade Policies (Road Transit Risks / Road Risks / Internal Risks) and policies that cover only Fire and / or Theft Risks.
  • Is the No Claim Bonus transferable?
    Yes, in case you are changing from one insurer to other and have accrued some NCB from the first one, you can always get the benefits for your NCB with the new insurer. You only need to show evidence that you are entitled to No Claim Bonus from your previous motor insurance company. Evidence can be in form of:
    • A renewal notice or
    • A letter confirming the NCB entitlement from the previous insurer
    • A written declaration
  • What is cover note?
    A cover note is a temporary certificate of insurance issued by the insurer before the issuance of a policy, after the insured has given a duly filled in proposal form and has paid the premium in full. A cover note is valid for a period of 60 days from the date of issue of the cover note and the insurer will issue the certificate of insurance before the cover note expires.

Claim Case Study - 1

1
Situation

NCB Wrongly Declared.

2
Challenge

Insurance Company has denied the claim and has cancel the policy as well.

3
Solution

Justify the reason for inadvertent misrepresentation and pay the difference amount of NCB and get the policy rectified accordingly for processing the claim.

4
Advisory/Conclusion

Always ensure to declare the correct information. In case the renewal premium cheque is issued one month in advance, then the claim position should be intimated for the intervening month subsequent to renewal. This ensures that these is no misrepresentation.

Claim Case Study - 2

1
Situation

Engine ceases because of entry of water in the vehicle.

2
Challenge

It is not covered under the standard motor policy.

3
Solution

There is only one solution which is to take the following precautions during rainy season: 1. Don’t park the vehicle in basement area, 2. Don’t park in the vehicle on the slope, 3. Don’t park in area where there is a small collection of water and possibility of accumulation.

4
Advisory/Conclusion

Always go for comprehensive policy with engine cessation add on cover to get the maximum coverage.

INSUROLOGY

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